HR Jailbirds: when breaking the rules means doing time

by Caitlin Nobes18 Jun 2013

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HR Jailbirds: when breaking the rules means doing time

It’s not easy to breach the Employment Standards Act (ESA) so severely you get jail time but a couple of Ontario employers decided to push the ministry’s limits with sheer stubbornness – or is it stupidity?

“It would take exceptional circumstances to receive a prison sentence for a violation of the ESA,” Filion Wakely Thorup Angeletti associate Brian MacDonald said, before expanding on some of those exception employers.

The man who never paid

Between March 2007 and October 2009 61 of Steven Blondin’s employees filed claims with the Ministry of Labour over unpaid wages. The ministry determined all 61 were owed pay, totaling more than $142,000. Instead of paying the wages Blondin inexplicably ignored the order.

In 2012 Blondin and his six companies pleaded guilty to failing to comply with the Ministry’s orders. In addition to unpaid wages, the companies were fined $240,000, and Blondin was personally fined $40,000 (both amounts exclusive of the victim fine surcharge).

More importantly, Blondin was also imprisoned for 90 days, an outcome he could have avoided had he paid the wages in the first place, or at least after the initial warning.

Employer Jailed for Failing to Pay Student Lifeguards

Another example of the court’s willingness to punish employers who refuse to pay wages is the decision of R. v. Check, [2012] O.J. No. 6410. 4

Bankrupt and broke?

Peter Check had a pretty good deal going. He owned a business that supplied lifeguards to condominiums across the Greater Toronto Area, and most of the lifeguards were university or college students seeking employment during their summer vacation.

After each season, Check would refuse to pay his young employees by dissolving the company or claiming bankruptcy. The next season, he would open up a new business under a different name and attract a new batch of young employees all over again.

An extensive investigation Ministry of Labour employment standards officers found that wages ranging from $80 to $3,100 were owed to a significant number of employees and the ministry issued three orders to pay between December 2008 and May 2009 for an amount totally about $63,000.

After numerous delays, Check was also fined $15,000 and sentenced to 90 days in prison.

Don't test the ministry

While the takeaway message could simply be Google’s famous “Don’t be evil”, the nuanced lesson is to take any ministry warning seriously.

“These cases indicate that courts will, eventually, lose their patience with employers that fail to comply with their obligations under the ESA,” MacDonald said. “If an issue arises, be it an informal complaint raised by an employee or a formal complaint with the Ministry of Labour, we advise that you not test that patience.”

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